Most of the weekend papers dealt with the upcoming visit by the IMF. The various articles on the topic reminded one a bit of Chicken Little: ?The IMF is coming, the IMF is coming!? Saturday?s Listin Diario, the government intervened paper, says that the IMF will be looking to see that the next government restarts the Standby Agreement. Reporter Candida Acosta says the IMF would rather the new authorities renew the ?stalled? accord instead of their incumbent counterparts. On the other hand, the IMF won?t hold President Mejia?s lack of initiative in renegotiating the accords against the country and just hopes that the final draft will get his support. The multinational financial institution demands that in order to conclude the first phase of the second review of the Standby Agreement signed last August, the nation?s monetary officials must ask for a dispensation to allow the IMF people to ignore the ?overages? of the financial goals set out in the agreement.
Today?s El Caribe, however, says that the IMF agreement to be worked out by the incoming monetary authorities will be much ?harder? and will contain more taxes and more controls on loans from foreign entities. Due to the excesses in current expenses of the PRD government during the first quarter, the terms of the renewed agreement will be much stricter. According to the paper, one of the top Central Bank managers, Apolinar Veloz, said that during April?s IMF visit, the team demanded that the government secure more income to cover the increased current expenses on one side, and much stricter controls in the handling of foreign loans that go to private contractors. Between January and March, the government exceeded its spending limits by RD$9 billion, and although some of this could be attributed to inflation and currency devaluation, the bulk of the money went to expenditures that were unnecessary. One expense was cited as a payment made by the Central Bank to the power generators.
Because the IMF had foreseen a PLD victory over the PRD, they did not complete the revision of the agreement. At the end of April they told the Central Bank that they would be signing something that others would be administering, without prior approval, and as such postponed the negotiations until after 16 May.
Tomorrow Jose Fajgenbaum, IMF Deputy Director of the Western Hemisphere and economist Roberto Steiner will arrive to meet with incoming and outgoing monetary officials to obtain an agreement on the tax reform legislation and other corrective measures.